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Glossary entry · What you own
ETF
Definition
Exchange-traded fund. A fund that holds many stocks (or bonds) and trades on an exchange like a single stock. Lets you buy a slice of an entire market with one purchase, and is the simplest way to diversify.
Example
Buying 1 share of VTI gives you a tiny piece of 4,000+ US companies at once.
From the lessons
Lesson · 03
ETF
This term appears in a longer lesson, where the idea gets the proper treatment with examples and a working visualization.
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What you own
Stock
A share of ownership in a company. You profit if the company grows; you lose if it falters.
Read →Bond
A loan you make to a government or company. They pay you interest, then return your money.
Read →Index
A representative basket of a market — like the S&P 500 or the IBEX 35.
Read →Index fund
A fund that simply mirrors an index, instead of trying to beat it.
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